The Falling Rate of Profit and the Great Recession of 2007-2009
A New Approach to Applying Marx's Value Theory and Its Implications for Socialist Strategy
Published on 29. November 2022
Book
Paperback/Softback
226 pages
978-1-64259-332-7 (ISBN)
Description
In this ground breaking contribution to Marxist economic theory, Peter H. Jones provides a comprehensive analysis of profit rates in the lead up to the Great Recession.
The Falling Rate of Profit and the Great Recession of 2007-2009 develops a new interpretation of Marx's labour theory of value rooted in non-equilibrium, and applies this theory to US national accounting data. In so doing Jones shows that, when measured correctly, the profit rate falls in the lead up to the Great Recession due to the rising organic composition of capital-the primary reason for crises in Marx's own account.
From there Jones also details a new theory of finance, showing how cycles in the profit rate relate to stock market booms and slumps, and movements in the interest rate. He then discusses the implications of this analysis, and Marx and Engels' work generally, for a democratic socialist strategy.
The Falling Rate of Profit and the Great Recession of 2007-2009 develops a new interpretation of Marx's labour theory of value rooted in non-equilibrium, and applies this theory to US national accounting data. In so doing Jones shows that, when measured correctly, the profit rate falls in the lead up to the Great Recession due to the rising organic composition of capital-the primary reason for crises in Marx's own account.
From there Jones also details a new theory of finance, showing how cycles in the profit rate relate to stock market booms and slumps, and movements in the interest rate. He then discusses the implications of this analysis, and Marx and Engels' work generally, for a democratic socialist strategy.
More details
Series
Language
English
Place of publication
Chicago
United States
Product notice
Paperback (trade)
Illustrations
Illustrations
Dimensions
Height: 226 mm
Width: 152 mm
Thickness: 18 mm
Weight
381 gr
ISBN-13
978-1-64259-332-7 (9781642593327)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Person
Peter H. Jones is an independent scholar based in Canberra. He completed his Ph.D. in 2014 at the Australian National University, and has been active in many political campaigns, including for refugee rights and against cuts to health care and universities.
Content
Preface
List of Tables and Figures
Advice to Readers
1 Marx's Value Theory and the Law of the Tendential Fall in the Rate of Profit
?1?The Development of the LTFRP and Its Significance
?2?Criticisms of the Law
?3?Summary
2 Devaluation
?1?Formalisms, Models and Method
?2?Devaluation and Value
?3?Historical Cost, Input Cost and Output Cost
?4?Measuring Devaluation
?5?The MELT and Revaluation
?6?The Rate of Profit, the Rate of Accumulation and the Rate of Growth
?7?Conclusion
?8?Appendix: A Counter-example to the Okishio Theorem Using Current Cost Measures of the Rate of Profit
3 Turnover Time and the Organic Composition of Capital
?1?Decomposing the Rate of Profit: Existing Approaches
?2?The Stock of Variable Capital
?3?The OCC
?4?Conclusion
?5?Appendix: Decomposing Changes in the Rate of Profit
4 Surplus Value, Profit and Output
?1?The Forms of Appearance of Surplus Value
?2?Unproductive Labour
?3?Measuring Surplus Value after Unproductive Expenditures
?4?The Value of Labour Power
?5?Measuring Output
?6?Differences between the Total Price and Total Value of Output
?7?Surplus Value after Unproductive Expenditures
?8?Profits from Production
?9?Conclusion
?10?Appendix A: Accounting Definitions
?11?Appendix B: Decomposing Changes in the Rate of Profit from Production
?12?Appendix C: Decomposing Rates of Profit When the Value of Labour Power Is Not Equal to Its Price
5 Marx on Finance
?1?Money Dealing and Interest-Bearing Capital
?2?Currency
?3?Social Relations and Interest
?4?Dynamics of the Interest Rate (I)
?5?Money Capital and Fictitious Capital
?6?Fictitious Capital and the Dynamics of the Interest Rate (II)
?7?Conclusions
6 The Rate of Profit and Financial Rates of Return
?1?The Separation between Financial Profits and Profits from Production
?2?Fictitious and Non-fictitious Profits
?3?The Non-fictitious Financial Rate of Return and the Interest Rate
?4?Conclusion
?5?Appendix: Accounting Definitions for Financial Rates of Return
7 Results
?1?Output and Surplus Value
?2?Measures of the Rate of Profit
?3?Why the Rate of Profit Fell
?4?The Rate of Profit and Financial Rates of Return
?5?The Rate of Profit and the Interest Rate over the Long Term
8 Conclusions
?1?The Rate of Profit and the Great Recession
?2?Capital and Marx's Value Theory
Bibliography
Index
List of Tables and Figures
Advice to Readers
1 Marx's Value Theory and the Law of the Tendential Fall in the Rate of Profit
?1?The Development of the LTFRP and Its Significance
?2?Criticisms of the Law
?3?Summary
2 Devaluation
?1?Formalisms, Models and Method
?2?Devaluation and Value
?3?Historical Cost, Input Cost and Output Cost
?4?Measuring Devaluation
?5?The MELT and Revaluation
?6?The Rate of Profit, the Rate of Accumulation and the Rate of Growth
?7?Conclusion
?8?Appendix: A Counter-example to the Okishio Theorem Using Current Cost Measures of the Rate of Profit
3 Turnover Time and the Organic Composition of Capital
?1?Decomposing the Rate of Profit: Existing Approaches
?2?The Stock of Variable Capital
?3?The OCC
?4?Conclusion
?5?Appendix: Decomposing Changes in the Rate of Profit
4 Surplus Value, Profit and Output
?1?The Forms of Appearance of Surplus Value
?2?Unproductive Labour
?3?Measuring Surplus Value after Unproductive Expenditures
?4?The Value of Labour Power
?5?Measuring Output
?6?Differences between the Total Price and Total Value of Output
?7?Surplus Value after Unproductive Expenditures
?8?Profits from Production
?9?Conclusion
?10?Appendix A: Accounting Definitions
?11?Appendix B: Decomposing Changes in the Rate of Profit from Production
?12?Appendix C: Decomposing Rates of Profit When the Value of Labour Power Is Not Equal to Its Price
5 Marx on Finance
?1?Money Dealing and Interest-Bearing Capital
?2?Currency
?3?Social Relations and Interest
?4?Dynamics of the Interest Rate (I)
?5?Money Capital and Fictitious Capital
?6?Fictitious Capital and the Dynamics of the Interest Rate (II)
?7?Conclusions
6 The Rate of Profit and Financial Rates of Return
?1?The Separation between Financial Profits and Profits from Production
?2?Fictitious and Non-fictitious Profits
?3?The Non-fictitious Financial Rate of Return and the Interest Rate
?4?Conclusion
?5?Appendix: Accounting Definitions for Financial Rates of Return
7 Results
?1?Output and Surplus Value
?2?Measures of the Rate of Profit
?3?Why the Rate of Profit Fell
?4?The Rate of Profit and Financial Rates of Return
?5?The Rate of Profit and the Interest Rate over the Long Term
8 Conclusions
?1?The Rate of Profit and the Great Recession
?2?Capital and Marx's Value Theory
Bibliography
Index